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election 2012, the year of small business took center stage. as america gets ready to vote, we look at the presidential candidat candidates' positions that affect small business openers and hear from the campaign and business owners on who it will help out the most. that's on this special edition of "your business." small businesses are revitalizing the economy, and american express open is here to help. that's why we are proud to present "your business" on msnbc.
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hi there, everyone. i'm j.j. ramberg. welcome to "your business," the show dedicated to giving you tips and advice to help your small business grow. on tuesday voters around the country will head to the polls to cast their ballots in the 2012 presidential election. that includes millions of small business owners, a constituency that both candidates have fiercely chorded. the issues facing small business owners have taken center stage during much of the campaign, so today we devote our show to issues we as owners face as we get ready to cast our votes. we start by examining the candidates' positions in two key areas. >> in small business that
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creates business in america. >> governor romney and i do share the business world. >> the issues confronting small businesses have been getting more attention than in any presidential election in recent history. the political rhetoric on what business owners need is heeding, but what exactly will president obama and governor romney do to help? president obama has cut taxes or extended small tax cuts for businesses 18 times. a number of those breaks have expired. he's also cut payroll tax cuts and cut the corporate tax rate from the current 35. governor romney wants to lower the corporate tax rate to 25% and wants to eliminate the corporate alternative minimum tax. >> 54% of america's workers work in businesses taxed not as the corporate tax rate but at the individual tax rate. and if we lower that rate, they will be able to hire more people. >> under my plan 97% of small
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businesses would not see their income taxes go up. >> the most contentious agreement is over the bush-era tax cuts. romney wants to extend them for all americans obama doesn't want to extend the bush tax cuts for those making over $250,000 a year, claiming only 3% of small business owners will be affected. romney says it would impact over a million small businesses and affect hiring. >> there was a survey done of small businesses across the country. i said, what's the affect on obama care on your hiring plans? three quarters of them said it makes us less likely to hire people. >> i was having the same conversations governor romney talks about, and it wasn't just that small businesses were seeing costs skyrocket and they couldn't get affordable coverage even if they wanted to provide it to their employees. >> the candidates differ sharply regard on obama care's effect on small business. governor romney issed ament he'll try to repeal the
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affordable care act and replace it with state-run programs. the president insists the 2010 health care law will increase the number is of insured helping small business owners afford coverage for employees. taxes and health care, just two of many small-business related issues the candidates have addressed. so whose policies are better fit for small business owners? john is the founder and ceo of small business majority and small business national advocacy group, and great to see both of you guys. >> great to be here, j.j., thanks. >> good to be here, j.j. >> let's get to the bottom of this. i want to take both of these issues separately. first we'll talk about taxes, extending the tax cuts or not to people earning more than $250,000. jean, i want to start with you, romney says this is going to affect 1 million small business openers and said it would affect hiring. how big of an issue is this?
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>> it is a big issue. it's important that governor romney is correct when he says most small business owners do pay tax at the individual rate, not at the corporate rate. that's why individual rates are more important when talking about taxes and tax reform. and i know that the figure floats around a lot, 3% of small business owners are affected by the top rate, it depends how you look at the number. that's when you count every single person who files any kind of business income. we think it is more like 15%. because we are looking at employers, employer firms, those who actually have employees. >> i haven't heard the 15% number before. the 3% number is pretty well accepted. in fact, there's really no, there's very little correlation between small businesses and their income and their hiring practices. and tax rates on the wealthy. we just actually did a poll which found that small businesses, a majority of small businesses would like to see the rates on the upper brackets go
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up because of their concern about the deficit and are much more interested in other targeted things that congress and the government can do to spur business growth. they are much more focused on a much greater number of small businesses and not just on a small sliver of wealthy people who may file some small business income. >> jean, i want to ask you one thing brought up a lot, so it is, you know, whatever this 3% or 15%, this also includes people who are partners in firms making a ton of money and whether they are taxed a little bit more on what they earn above $250,000 or not will not actually affect whether they hire somebody or not. how do you respond to that? >> i mean, i guess, i can't really comment too much on the super wealthy of the self-employed because that's not whom my association represents, but for small business owners in general, it is really about cash flow and what your expenses will be and what your cost of business will be. that's how hiring decisions are made, it is based on a need that
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comes from customer demand, but it is based on cash flow. can you afford to hire the employee and keep them for the long-term? >> john, do you think that this is going to have any affect on hiring? >> there's no evidence that it will have an effect on hiring. most small businesses is cash flow, that's why it is important that we have policy that is are enenacted to the majority of small businesses. there are proposals the president made sitting in congress, proposals for increasing desuctiduction for equipment, tax credits for hiring new employees, and these are just sitting through not acted upon. these are provisions that would have a much greater impact on the vast majority of small businesses than tax cuts for the upper 3% of small business owners. >> so is this a big deal at all? we have spent so much time, the candidates have spent so much time debating this and specifically how it affects small business. is it a big deal for small business, john?
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>> we are finding most small businesses are actually happy to see the rates go back to their previous levels for the upper brackets. 97% of small businesses pay an income tax in the lower brackets for those who pass through their income, and they obviously don't want those rates to go up, so that's where we need to focus. and then we need to focus on other policies, there is a role for government in enacting other policies that can be very targeted, targeted toward job creation, whether it is evidence that it will affect job creation and target it toward a much greater number of businesses then, a small sliver of the super wealthy. >> so, jean, john keeps saying there's no evidence it will affect job creation, what evidence do you guys have that it actually will? >> governor romney did cite our study in the first debate, which we worked with ernst & young and came up with about 700,000 jobs that would not be created, which is significant by anyone's measure. and while this debate is
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incredibly important, i do worry sometimes that it takes some of the oxygen away from some other issues concerning small business. most of which is uncertainty. the more the issues are discussed and not resolved the worse the uncertainty is for the small business community and that's plaguing them, they need to know what their taxes will be. >> john, i want you to respond, 750,000 jobs is a big number. >> the study that jean referred to, what it does is it talks about the large number of business that is have passed through income, which is absolutely true, and then it says, well, these are the impact if you raise taxes on all of those businesses. the issue on the table is not raising taxes on everybody who has passed through income, it is only on those in the top 3%. so the numbers in the study flow from looking at all of pass-through businesses but, in fact, that's not what is on the table here. >> so, jean, the nfib brought suit against obama care saying
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that this is going to affect small businesses, in what way? the majority of small businesses who will be affected, small businesses with 50 or more employees, most of them already provide health care. so the mandate to provide health care isn't going to affect them adversely in terms of needling to, so in what way do you think it will affect people adversely? >> well, i think the employer mandate of 50 employees or above can be a bit distracting. while it is important and nfib is opposed to it, don't forget about the individual mandate, the requirement all individuals purchase health insurance, which is the grounds which we sued and it went to the supreme court. at the court of all health care issues for small business is cost. what's so troubling to us about obama care is that it increases costs. costs are already increasing and they are almost unbearable for this community. obama care promises to make the costs rise, certainly not lower them. >> well, we couldn't agree more that cost is absolutely critical. but the fact is that the
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individual mandate is, the so-called individual mandate, is causing costs of private insurance, it is actually going to solve the problem of private insurance being greater because right now you have people getting care that's uncompensated and all of us with insurance are paying for that. we actually see the individual mandate as a cost-containment measure. >> all right. jean and john, thank you guys so much. throughout the past ten months you have given us insight enlightening us on both of these issues. over the past year we have brought you the opinions of small business owners on the presidential race in our small biz sounds off segment. today we bring back four of the most outspoken participants. brian cohen, the chairman of the investment group new york angels, he is supporting president obama. carol roth is a business strategist that you can find online at carolroth.com sporting
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governor romney. rob bato is a romney supporter and evelyn anderson is the owner of ashlyn playground, great to see you guys. by lots of demand, you four are back here. carol, one of the most outspoken people, i want to start with you. it is hard to get down to the numbers when we talk about taxes and extended or not the bush tax cuts of how many people this is going to affect in terms of jobs, what it will do to small business, do you think it is a big deal or not? >> i think it is a huge deal, j.j. one of the reasons why you cannot rely on the numbers is that people aren't rational in love, in business, in money. we don't focus on the numbers and always make the rational decisions. we go with the emotional decisions. so right now all of this uncertainty, whether it really impacts the bottom line or not, we will never know, but what we
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do know is the uncertainty affects the small business owners and it affects the consumers. and that is all of the difference. >> you take, you look at my small business, i have 45 people that work for my organization, i'm not going to continue to invest at the level i have been investing if there's less money in my pocket. you tell my any small business owner if you take money out of their pocket they will continue to invest, i don't think that's going to happen. that's the challenge this election. >> regardless of the level, even if it's a few dollars, a thousand of dollars, that's the mentality. i have less so i'm not going to put more out there. >> flip that around and say, okay, i'm going to give you a tax credit and you're going to get a few more dollars in your pocket. does that -- does that mean more, putting a few dollars into your pocket, does that mean more than taking a few dollars out of your pocket? >> it depends on how much and the permanence. i think that permanence is one of the key issues here. even though we have had quote/unquote 18 tax cuts, which we can debate that all day, they have not been permanent and
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scaled back and small business owners can not make decisions on something that happens over six months. >> that's not the question. the question was specific. if you take more money out of their pockets, will it inhibit them from hiring people? >> the answer is yes. it's a direct line. >> i have not seen research and would love to have somebody show it to me. there's a direct correlation between small business and the taxes and which they hire. >> i have 2.5 million customers, i speak with them on a daily basis and they tell me they are not making decisions not just because of the uncertainty but seriously because they know more money is coming out of their pocket. >> i think the people you talk to, do they make over $250,000? >> some of them are, some aren't. >> this one particular, it doesn't affect them if they are not making over $250,000. >> no, absolutely it does affect them because they get paid, most of them, at a personal tax rate. so anything that affects the
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personal tax rate, that's how they get paid. >> assuming everyone who makes under $250,000, those tax cuts are extended. we are only talk about whether or not they extend them to people earning more than $250,000. >> no, but we are also talking about lowering the tax rate for personal income. so it actually does matter because it means they will have more money to invest in their business. >> for people who earn more than $250,000, both of them want to do it for people who earn less than $250,000. that's not debated. >> that's not debated. >> not debatable. >> right, got it. i'm asking you for the people who earn more than $250,000, is that who you are talking about that won't be hiring more people? >> many people i talk to earn over $250,000, my average client has 16 employees. that's twice the size of the average small business in america. yes, some of them do make over $250,000. and they are going to make personal sacrifices potentially to keep their businesses. >> what kind of sacrifices are they going to make? that's reality. >> personal sacrifices means
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less money out of their pocket. if you take pocket out of a guy like mine, i'm more likely to not invest -- >> evelyn, i want you to chime in, your business does not make more than $250,000 or you do not make more than $250,000 a year. you would not be affected by this. where do you fall on this issue? >> it seems to me that our primarily focus is we'll hire based on demand. as demand rises, that's when we hire more. it also seems to me that we had a ten-year experiment with the lower tax rates during the bush administration, during the decade of the 2000's and did not see a growth in jobs created. and that resulted in a great recession. so it does seem to me this has been tried. the tax cut experiment has been tried. and it did not succeed. and i would be in favor of targeted tax cuts that would
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affect the bottom line for me when i hire someone. >> evelyn, i'm going to bring you into this, too, how much of a credit do you need in order to hire someone? i get it, if you're a company that has 450 employees and you're going to hire 200 more, then money adds up. if you are just going to hire one more person, how much of a tax credit do you need to have that incentive to help you make that decision? evelyn? >> in my decision i don't need a tax credit, i need the business and the demand for my products and when that comes i have to hire people. we are looking to hire next year. >> that's exactly the issue. if people have more money for take home pay, if people have more jobs, they may go out and spend, it drives the demand. you can't take the issues one by one, they are all part of a process here. >> i think people misunderstand when everything resets at the beginning of this year, middle-class americans are going
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to see a tax increase. people are delusional to see they are not going to see, between $45,000 to $60,000, there could be a $2,000 increase on their federal income taxes. if you take a high-income wage earner, they could be paid 50% of their earnings. >> the tax issue is a political issue right now. and as the discussion has been noted here by j.j., it doesn't affect most of these companies. it doesn't. >> i'm going to have to step us as we go to break, but we'll have all four of you back to continue this discussion. when we return, we'll continue our discussion on which presidential candidate is best for small business. we've all had those moments. when you lost the thing you can't believe you lost. when what you just bought, just broke. or when you have a little trouble
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a long way from home... as an american express cardmember you can expect some help. but what you might not expect, is you can get all this with a prepaid card. spends like cash. feels like membership. brian cohen, carol roth, evelyn, i want to talk to you first. you have had a hard time and you have done an amazing job, but has access to capital been an issue for you? >> no, not particularly. we haven't gone out and tried to get any, so it hasn't been an issue. >> so why not? >> if we do -- >> our credit is lousy, so we can't really, it's as simple as
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that. but if we do, we would be looking more to the crowd source funding, the cloud funding, the things, one of the things that the president did pass successfully was a change in the way that small businesses can acquire capital through small individual investors. that's definitely something i want to explore when the time comes for us to do a major expansion. >> i think you are so typical of so many people, evelyn, which is your business has gone through a hard time but you haven't gone out and looked for a loan because you either don't qualify or are uncertain they can pay it back. the laundromat person i talked to said i can get a loan, but if i'm not getting customers, what's going to happen? >> i have a client get a $600,000 line of credit. we finally got it. he was bankable. he showed he has cash flow to repay the debt. evelyn may not have that cash
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flow. that's what's happening. there's not access to capital. some of it is available. a lot of small business owners don't have the assets they are capable of lending them on. i'm a founder of a small community bank. we raised 30 million bucks to open the bank. we are lending money to people that can repay the debt. >> tell me, access to capital. the president or romney, who is going to make it better? >> no question. obama sees the big picture. new techniques have to be created. the banks have strict guidelines. i come from a risk-driven perspective. as an angel investor, we put tons of money to work. >> why would you not expect money back? >> we understand the risk.
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the reality of our game, it is a game, i have written a book on it. if you don't do it right, you are going to lose. part of my interest is to make sure people do it right. >> back to the candidates. access to capital. it's an interest for a lot of people. who is better? >> both of them have good points. i think romney is better because he understands it better. he comes from the business sector. he used to be a venture capitalist, he used to be in private equity. i will give president obama credit for the jobs act. i do think, as somebody who formerly owned a broker dealer, the crowd funding for real crowd funding for start-up businesses is not going to be as robust in the overall small business community. >> quickly moving to health care. evelyn, you were a supporter of obama care. why? >> yes, i am. >> how does it help your company? >> being able to buy insurance in a large pool of people
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opposed to my small business getting a policy for ourselves. it makes a huge difference. we can buy at the same types of rate that is large corporations get. i really look forward to that. those are the health exchanges for each state. i look forward to being able to look online on the internet and look at all the policies and make decisions for myself without the pressure situation of talking to basically a sales representative for an insurance company saying this policy is better than that. i would rather look at it myself and think about it and really ponder what our needs are and look at the costs of everything and make our own decisions. >> evelyn is an educated consumer. she wants to spend time looking at it. looking at the different health plans, you can't make heads or tails of the health plans. unless you have an expert, somebody trained in helping you, it's a disservice. they could be picking the wrong
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plan. >> there's a disservice to business people right now, whether this is the answer or not, right now, it's impossible to choose health care plans if you are a small business owner. i spent so much time on it. it is impossible. >> i don't think it's about the type of plan it is. i think there's a crisis of humanity. i think there's so many employers who don't offer quality health plans to their employees. what percentage of people are bankruptcy, a health issue away from horror stories in their lives. we have a responsibility to help people and create happier employees. they are going to cost more. >> everybody is very clear we want people to be covered by health care. the question is the implementation. my problem with the affordable care act is the same problem a lot of small business owners are having with it. anytime you put the government in the middle of something, it ends up being more expensive.
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every small business owner i have spoken to across the board, we are talking thousands of small business owners, believe their health care costs are going to go up. >> all the government is doing is giving us a venue to make choices. it seems to me, if you add millions and millions of new customers to an industry like health care, by definition, if you get more customers your cost per customer goes down. it's a business principle. >> ask one side costs will go up, ask the other side it will go down. we have to end this segment, unfortunately. i want to end by asking each of you, as a small business owner, take social policy aside, as a small business owner who is concerned with small business interest, why you should vote for your candidate. evelyn, let's start with you. >> one of the reasons is that i think people forget that government spending does often provide jobs in personal terms,
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i know of three companies, including our that is benefited from government spending over the last few years. women in construction. a company that didn't have to lay off employees because of stimulus money. we got some of it. the general contractor on the job that we are currently working just came off a three year job. so, i would like to see more of that kind of spending. i have a lot of jobs lining up for next year. most are for towns. that's government spending. it's government money. >> got it. >> that, to me is going to be beneficial. >> carol. romney. >> as a small business owner, you live and die by -- you are responsible and accountable. you have to do what you say you are going to do or you go out of business. we have a president who said $9 trillion in debt was irresponsible. i'm going to cut it in half and instead he added 60%. he said he was going to lower
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the unemployment rate. we are at 7.8%. we had 43 months of over 8%. as a small business owner, i cannot extend four years to somebody who didn't get done the most important things that affect our economy. plain and simple. >> brian. >> that's taking a negative. what is the positive? the positive is education. obama is a huge education proponent. he's driven to training. that's the core. we are going through a transition nar period. i know education and training is critical. access to capital? jobs act. whole new big idea. i'm driven into the entrepreneur party. not republican, not democrat, but the entrepreneur party, conservatism in spending. there's no question e barack obama represents that growth.
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>> rob? >> we have to realize we are not an insular nation. one thing that excites me is romney is going to get tough on china and the devaluation of our dollar. i think it creates a challenge because it presents pressure. leveling the playing field make the tax rates more acceptable to high earners and americans. i'm going to vote for romney. >> brian, carol, rob, evelyn, we appreciate this lively and interesting discussion. i hope it's helpful to everyone out there trying to make a decision this week. thanks. to learn more about today's show, click on our website, it is openforum.com/yourbusiness. you'll find all of today's segments there plus web exclusive content with more information to help your business grow. follow us on twitter@msnbcyourbiz. become a fan on facebook.
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next week, customer involvement helped improve one company's bottom line. >> at any point along the way, if you would like to come in and make sure it's going in the direction you think it's going to go, then you are welcome to come anytime. >> we'll tell you why client visits like this one are helping make this company more efficient. until then, i'm j.j. ramberg. remember, we make "your business" our business. we've all had those moments. when you lost the thing you can't believe you lost. when what you just bought, just broke. or when you have a little trouble a long way from home... as an american express cardmember you can expect some help.

tv
Your Business
MSNBC November 4, 2012 4:30am-5:00am PST

News/Business. A focus on issues facing small business in the United States.

TOPIC FREQUENCY Obama 7, Evelyn 6, Us 5, America 4, Jean 4, John 3, Carol Roth 2, J.j. 2, Carol 2, Brian Cohen 2, J.j. Ramberg 2, An American Express 2, Permanence 1, Chorded 1, Msnbc 1, China 1, You Look 1, Rob 1, Romney Issed Ament 1, Evelyn Anderson 1
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